Two Chinese State Companies Seek $2.5 Billion in Bond Sales

Workers install a high voltage electricity pylon in Xuancheng, Anhui province, in this May 17, 2011 file photo.

Reuters

Two big state-owned Chinese companies on Wednesday were seeking to raise a total of around US$2.5 billion by selling U.S. dollar-denominated bonds, as Asian companies continue to take advantage of abundant global liquidity and low interest rates to raise funds.

The offerings come as companies in Asia are selling bonds at a record pace so far this year, tapping demand among global investors seeking higher yields in emerging markets.

Three Chinese state-owned energy giants–China National Petroleum Corp., Cnooc Ltd. and China Petroleum & Chemical Corp., or Sinopec–in the past month alone have sold US$9.5 billion of bonds, more than all of last year. Indonesian state-owned oil and gas company Pertamina sold a US$3.25 billion bond Tuesday.

Now State Grid Corp. of China, the country’s largest power-transmission company, is getting into the act. It is seeking to raise up to US$2 billion in its first offering of a dollar-denominated bond, according to a term sheet seen by The Wall Street Journal on Wednesday.

The Beijing-based company, the world’s largest utility by revenue, will use the proceeds for general purposes, an offering document showed.

The company is planning to set the yields at around 1.96% for the five-year bond, and 3.43% and 4.64% for the 10-year and 30-year bonds, respectively, the term sheet showed.

State Grid hired HSBC, Goldman Sachs (Asia) L.L.C., Morgan Stanley and BOC International as joint global coordinators, the term sheet showed. These banks are joint lead managers and joint bookrunners, along with ICBC International, J.P. Morgan, Citigroup, Deutsche Bank and UBS, it said.

Meanwhile China International Marine Containers (Group) Co., the world’s largest maker of shipping containers, is seeking to sell a benchmark-size dollar-denominated bond, according to another term sheet seen Wednesday. A benchmark bond is usually around US$500 million or more.

The company plans to set the yield for the unrated, five-year bond at around 3.51%, the term sheet said. It plans to use the proceeds to refinance loans and for general purposes, an offering document showed.

The yield will be determined as early as Wednesday, the term sheet showed.

Standard Chartered and UBS are joint global coordinators of China International Marine Containers’ bond, the term sheet showed. The two banks are also joint bookrunners, along with ANZ, Bank of America Merrill Lynch, HSBC, ICBC Asia, ING and JPMorgan, it said.